Satisfaction and Release of Contract

							       Chapter 19
DISCHARGE OF CONTRACTS
Conditions Relating to Performance
  Classification of Conditions: If the occurrence or
   non-occurrence of an event affects the duty of a party
   to perform, the event is called a condition.
     Condition Precedent is a condition that must occur before
      the party is obligated to perform.
     Condition Subsequent is a condition that, if it occurs after
      an agreement is reached, may cancel the contract.
     Concurrent Conditions are conditions that must happen
      simultaneously in order for the contract to be completely
      executed.


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     Discharge by Performance

Most contracts are discharged by performance.
An offer to perform is called a tender of
 performance.
If a tender of performance is wrongfully
 refused, the duty to perform is terminated,
 except when the duty was the payment of
 money.


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          Time of Performance

 Ordinarily, a contract must be performed exactly in the
  manner specified by the contract.
 When a contract does not state when it is to be
  performed, it must be performed within a reasonable
  time.
 If time for performance is stated in the contract, the
  contract must be performed at the time specified if
  such time is essential, or within a reasonable time if
  the specified time is not essential.


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     Adequacy of Performance

Substantial Performance: A party who
 substantially performs in good faith is entitled
 to payment, offset by any defect or damages.
Fault of Complaining Party.
Satisfaction Contracts.
   To original party.
   To third party.


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 Discharge by Action of Parties

 Unilateral: Consumer Credit Protection Act gives
  right to cancel the contract within three days.
 A contract may be terminated by an agreement,
  either a provision in the original contract or a
  subsequent agreement.
 A contract may also be discharged by the
  substitution of a new contract for the original
  contract; by a novation (a new contract with a new
  party); by accord and satisfaction; by release; or by
  waiver.

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               Impossibility

 A contract is discharged when it is objectively
  impossible to perform due to unforeseeable
  conditions events.
    the destruction of the subject matter,
    the adoption of a new law that prohibits
     performance,
    the death or disability of a party whose personal
     action was required for performance of the
     contract, or
    the act of the other party to the contract.

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   Commercial Impracticability

A contract may be discharged when its
 performance is impractical by subsequent
 occurrence of event(s) which was a material
 aspect to the contract.
Generally the event must not be foreseeable.




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   Commercial Impracticability

Increased cost ordinarily has no effect on a
 contract, but if the increase is grossly
 disproportionate to the original cost, some
 courts will classify the situation as one of
 commercial impracticability and discharge the
 contract.
C.I. was not recognized at common law.


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        Frustration of Purpose

In the case of frustration of purpose, the
  contract can be performed, but the performance
  has ceased to have any significant value to the
  party who originally contracted to obtain that
  performance.
    For example, renting a stadium to hold a
    football game, then the team is killed in a plane
    crash. The contract for the stadium may be
    voided since neither party could foresee the
    cancellation of the game.

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      Temporary Impossibility

Temporary impossibility, such as a labor strike
 or bad weather, has no effect on a contract.
It is common, though, to include protective
 clauses that excuse delay caused by temporary
 impossibility.




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Discharge by Operation of Law

A contract may be discharged by operation
 of law.
This occurs when:
   (1) the liability arising from the contract is
     discharged by bankruptcy,
    (2) suit on the contract is barred by the
     applicable statute of limitations, or
    (3) a time limitation stated in the contract is
     exceeded.

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              Review: Discharge
                   Unilateral Action   Consumer Protection Rescission

                                       Substitution
                     Agreement
                                       Accord and Satisfaction

                                       Destruction of Subject Matter

Performance   OR     Impossibility     Change of Law
                                       Death or Disability - Personal Service

                                       Act of Other Party

                     Economic
                   Disappointment      Commercial Impracticability

                                       Economic Frustration

                   Operation of Law    Bankruptcy

                                       Statute of Limitations
                                       Contractual Limitations

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             Review: Discharge
                                      Tender
 Discharge
     by                              Payment
Performance
                                      Timely

                        Adequate (substantial performance)



                          Consumer Rescission Rights
Discharge
    by                            Agreement
 Action
of Parties                   Substitution of Parties

                             Accord & Satisfaction




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            Review: Discharge
                                            Destruction of Subject Matter
                                                  Change of Law
                    Impossibility
Discharge                                     Death or Disability
   by
External             Commercial Impracticability
 Factors
                         Frustration of Purpose

                        Temporary Impossibility, like Weather



                                           Bankruptcy
     Discharge by
      Operation                       Statutes of Limitations
        of Law
                                    Contract Time Limitations



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